Three reasons why blockchain isn’t a security silver bullet

In previous blog, we broke down what blockchain technology is, but now it's time to think about what really matters: 1. How secure is blockchain – is it a silver bullet? And 2. What does blockchain mean for security?

Blockchain, without doubt, is a very exciting new technology in the digital world. The encrypted digital ledger could drive innovation and tackle the cyber challenges in the future. The platform can make transactions faster, prohibit fraudulent behaviour in a secure way and detect if any data has been meddled with due to its inalterability, transparency, data encryption and resilience (particularly as there is no single point of failure).

In the shared network, each participant has a private key which acts as the individual’s digital signature for each transaction and if this is tampered with, the signature becomes obsolete and the peer network will immediately be made aware of this. This early visibility then prevents any further damage from happening.

Finally, as the blockchain platform is decentralised and shared across regularly updated peer-to-peer networks, it is a hacker’s worst nightmare. It would require a lot of expertise, technological advancements and computing power to hack into every instance of the blockchain.

But let's not get carried away. As we all know, there is no silver bullet when it comes to security and nothing is impenetrable for the cybercriminals in the world today. 2017 saw many hackers being successful in stealing millions of pounds from the holes they found in the blockchain technology, from a simple wallet hack to a malware bug in piece of software code. Examples of these are the Parity Wallet breach, the Enigma Project scam and the Tether Token hack.

Another major problem with blockchain is that there are no regulations. The 'right to be forgotten', published in the GDPR data regulations, cannot be applied to blockchain. The platform currently cannot be destroyed, so this is a clear issue. Transparency is also a security issue relating to this. It works for bitcoin transactions, as anonymity already exists, but it would not work for bank statements. Undeniably, people would not want to show these to the whole world. Finally, the complexity of the technology and the sheer size of the network causes problems. Firstly, this is down to the speed and efficiency of the transactions, which is reduced dramatically if the blockchain system grows too big before a solid infrastructure is in place. Secondly, the complexity makes it harder for people to understand and when the network is expanding, at the smallest stage of growth, the blockchain is very vulnerable to attacks.

Nonetheless, we must not forget the future opportunities for blockchain. Although it may take a couple of years until these issues are fully ironed out, blockchain has huge potential. It will be the future of protecting sensitive records and authentication, making passwords obsolete, enhancing IoT security structurally and the privacy and security of internal communications and digital chats. Large enterprises are already looking into how these technologies can help their businesses grow and how they can monetise it to create secure future solutions. We must watch this space!

Cyber security is a key concern for organisations of all sizes. Protecting devices, networks, data and apps is an essential component of doing business. Vodafone provides security products and services to businesses of all sizes, helping you secure your business anywhere because we are everywhere. We are trusted by organisations globally, including utilities, financial institutions and government agencies. For more cyber security, insights, you can find us on LinkedIn.

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